The manufacture of costume jewelry is one driven by fashion and trend forecasts. Product life cycles are short, sometimes lasting only six months or so, and designs are varied. Major product lines include men and women’s fashion accessories such as hair ornaments, tie clips, necklaces, bracelets, bangles and various novelty items. These are made from a a variety of mostly local and indigenous materials including natural fibers, sea shells,
coconut shell, non-precious metals and plastic parts.

The local costume jewelry industry is dominated by micro, small and medium sized enterprises. Most, if not all, of firms in the industry are situated in Cebu province. As per DTI estimates, there are about 140 manufacturers in the industry at present, employing about 10,000 workers. The industry relies heavily on subcontracted work with most exporters outsourcing work to a number of smaller firms.

Global demand for costume jewelry reached about US$6.3billion in 2004 based on data from the United Nations Statistics Division (UNSD). The largest market is the United States which accounted for some 22% of world imports of costume jewelry in 2004. Imports by the 25 member European Union amounted to Euro 2 billion in the same year. On the supply side, Hong Kong and China are the largest global exporters, accounting for a combined 37% of world
exports of costume jewelry for 2004.

Local exports of costume jewelry experienced a surge in 2005, reaching US$63 million, an increase of 46% over the previous year’s level. This is the highest export value attained since the year 2000. The United States remains the largest buyer of the industry, accounting for about a third of costume jewelry exports in 2005. Other major markets include Great Britain, France, Spain, Japan and Italy.

Despite the good export performance of the industry recently, there are a number of concerns which need to be addressed for the sector to sustain its growth. In the inbound logistics part of the costume jewelry value chain, the gatherers and suppliers of materials lack proper organization, skills and resources to ensure quality of supplies and efficient operations. There is still substantial wastage and materials rejects among suppliers which consequently increase materials cost. R & D on materials used by the industry is also lacking which limits the types of materials manipulation and pre-processing that could done.

Costume jewelry manufacturers can usually come up with a wide variety of designs. However, there is a need to be more focused in their product development. At present, companies have a low ratio of sales to actual designs made. Firms needs to improve their design forecast based on fashion trends and colors.

Production operations are predominantly manual, with occasional use of semi-automated systems and relies heavily on subcontracted work. This situation raises issues on quality control and reliability of subcontractors. There are no industry wide standards which could be used in quality control systems. Firms normally rely on visual inspection to ensure quality.

Although most operations are conducted manually, workers lack skills and access to better tools which limit their productivity. In addition, manufacturers also need to improve their plant layout and facilities design to increase efficiency.

In marketing, the industry needs to expand current market development efforts in order to take advantage of the good demand for its products. This will require updated market information and the development of a coherent industry wide marketing program. Attending trade fairs are a good source of buyers but entail significant cost. The sector has to find other marketing activities to complement and support their efforts in the trade fairs.

The challenge for the local costume jewelry sector in the next few years is to sustain its growth in the global market. Besides expanding market development efforts, the sector also has to institute improvements in the early stages of its value chain to increase productivity and remain competitive.


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